Many business owners don't realise that there can be significant immigration implications to buying or merging with a UK business. Our immigration experts explain what you need to think about.
Acquiring or merging with a UK business can have significant immigration implications, particularly where overseas owners or sponsored workers are involved.
The steps you'll need to take will depend on the structure of the transaction, whether staff are relocating to the UK and whether the business already employs workers sponsored under the UK's immigration system.
When do immigration issues arise?
The immigration implications of a merger or acquisition will usually fall into one of three scenarios:
An individual acquires a UK business and wants to relocate to the UK to manage it.
An overseas company acquires or merges with a UK business and wishes to transfer employees to the UK.
A business acquires a UK company that already employs sponsored workers, creating sponsor licence and compliance obligations.
Scenario 1: An individual acquires a UK business
If you're acquiring a UK business and intend to relocate to manage it, there are several immigration routes that may be available.
Innovator Founder visa
The Innovator Founder visa is designed for individuals with an innovative, viable and scalable business idea supported by an approved endorsing body. This visa is granted for three years and can lead to settlement if the relevant requirements are met. Applicants must also demonstrate that they have held at least £1,270 in savings for 28 consecutive days before applying.
Although purchasing an existing business may qualify in principle, obtaining endorsement can be more challenging, as many approved endorsing bodies focus on new business ventures rather than business acquisitions.
Skilled Worker visa
Another option may be the Skilled Worker visa, provided there's a genuine job offer from a UK employer holding a Home Office sponsor licence and the role meets the relevant skill and salary requirements. Although this route places additional obligations on the employer, it may be a more practical option in some circumstances.
Scenario 2: An overseas company relocates employees to the UK
Where an overseas company acquires or merges with a UK business, it may need to transfer senior employees or specialists to the UK.
The Senior or Specialist Worker visa can provide an effective route for multinational organisations to relocate key personnel on a temporary basis.
To use this route:
the UK entity must hold the appropriate sponsor licence
each employee must receive a Certificate of Sponsorship
employees must meet the relevant eligibility, salary and qualifying employment requirements.
Scenario 3: A UK business employs sponsored workers
Even if no overseas staff are being transferred, immigration issues can still arise where the acquired business already employs sponsored workers.
Sponsor licences cannot be transferred between legal entities. As a result, the acquiring business may need to:
obtain its own sponsor licence
assume responsibility for sponsored workers
comply with Home Office reporting requirements following any change in ownership or control.
What happens if TUPE applies?
Whether the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) apply will often determine the immigration steps that need to be taken.
Where TUPE regulations apply, sponsored workers can often continue working for the new employer without making a fresh immigration application, provided the appropriate sponsorship and reporting requirements are met.
Where TUPE does not apply, the acquiring business may need to sponsor affected workers under its own licence and issue new Certificates of Sponsorship.
The exact requirements will depend on the structure of the transaction, the immigration status of the workers involved and the roles they will undertake after completion.
Why immigration should form part of your due diligence
Immigration considerations should be addressed early in any merger or acquisition. By reviewing sponsor licence obligations, existing sponsored workers and any planned employee relocations during the due diligence process, you can help identify potential issues before completion and reduce the risk of compliance breaches after the transaction.
How our immigration solicitors can help
Whether you're acquiring a UK business, relocating overseas employees or managing sponsor licence obligations following a merger or acquisition, obtaining the right immigration advice at an early stage can help avoid delays and ensure ongoing compliance.
Our specialist immigration solicitors advise businesses on every stage of the transaction, from due diligence through to sponsor licence compliance and employee transfers.
